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SEC supports electronics share certificates

The Acting Director-General, Securities and
Exchange Commission, Mr. Mounir Gwarzo, has said the commission is committed to
dematerialisation in the capital market as one of the means of boosting
investors’ confidence.

Dematerialisation refers to the conversion of
share certificates (physical paper form/certificates or documents of title
representing ownership of securities) to an electronic form, which is domiciled
directly with the Central Securities Clearing Systems.

Gwarzo, who spoke about dematerialisation in
Abuja on Tuesday when the management of the CSCS visited him at the
commission’s headquarters, stressed that SEC was ready to work with stakeholder
to conclude the process.

He was quoted in a statement by SEC as saying,
“We have already commenced the dematerialisation process; if not for certain
things it would have been concluded by now. We are ready to work with
stakeholders to ensure that we conclude the process.

“One of the critical parts of this exercise is
public enlightenment and we will be in the market in the next few weeks to tell
people to open their accounts, sort out the issues with e-dividend and get
ready for dematerialisation.”

According to the acting SEC DG, the commission
will make use of radio jingles, newspaper adverts and other enlightenment tools
to reach to public.

Gwarzo stressed that after public enlightenment,
a critical part of the dematerialisation process, all stakeholders could then
work on other parts of the issue to bring it to a conclusion.

The Managing Director and Chief Executive
Officer, CSCS, Mr. Kyari Buka, assured SEC of its full co-operation and
support.

He said “Sustainability of the regulatory agency
is one of the things dear to us. Our hope and belief is that even in acting
capacity things will continue and there will be sustainability of the entity.
The regulatory framework that has been started will continue.

“Dematerialisation is one of the things very
important to us. We very strongly believe that many of the things that have
happened have something to do with dematerialisation. If share certificates are
in electronic form, many of the issues relating to the paper certificates will
not arise.

“The paper one can be lost, stolen, doctored
among others, we simply believe that dematerialisation is one important area we
should look at and conclude. If we do it rightly, we will help boost investor
confidence.”

The CSCS MD called on SEC to design a resolution
mechanism that would guaranty smooth transition from one custodian to another.

He said, “We should come up with a resolution on
how best to handle such issue. The root cause is account opening data. If such
vital information is with the regulator, in the event that the House goes dead,
the process of resolution becomes easy for everybody.

“Mechanisms that could electronically control
these can lead to speedy resolution of such issues.”